Of dysfunctional labour market

The Nigerian labour market is currently dysfunctional. A manifestation of this malaise is the level of unemployment in the market. This had always been the problem even when the economy was experiencing growth of an average of more than six percent. It was a period of economic growth without job creation. A disturbing aspect of this problem is the nature of the unemployment which is skewed in favour of young persons between the ages of 15 and 24 years. And, this situation has grave social implications because an observable characteristic of this group of unemployed persons is that a significant proportion of them are primary and secondary school graduates or dropouts. A good number of them are also products of monotechnics, polytechnics, universities and other specialized tertiary institutions such as Colleges of Education, Technical Colleges, Nursing Schools and so on. These idle young minds are normally restless and fertile breeding grounds for criminal and other unwholesome activities.

This problem calls for some serious and hard thinking on the part of the managers of the economy at both the Federal and State levels of governance.

Here are some suggestions that need serious consideration.

The labour market needs to be more flexible and organized. A fundamental problem is that our labour market is too rigid to generate employment that can support the required GDP growth. There is no free flow of labour across markets due partly to too much adherence to “State of Origin” in public service recruitment at the state level. This explains why, for example, most northern states, despite the fact that there may be vacancies in their public service, do not engage southerners. In some cases, they even prefer Asians.

We need to free our work schedules and salary payment systems. Work schedules and salary payment systems are too rigid in the public and in the formal private work environments. Workers of all categories are engaged in most cases on tenure bases and paid salaries on monthly basis even low-income earners like clerks, messengers, drivers, cleaners, gardeners, cooks, factory workers, etc. And, all these workers work, officially, from 8.am to 4pm, Monday to Friday. In other more organised climes, these set of low-level workers are engaged on hourly basis and paid weekly or bi-monthly and do not work on permanent basis. Employers draw from a pool and workers choice of working schedules are flexible. And, because of constant power supply, work space is 24 hours and workers are engaged in shifts allowing more persons to be engaged. This creates more avenues for employment which will further increase the potentials for higher GDP.

We must liberalize the salary structure in our public service. Currently, our salary structure is too rigid. In the public service, a level 8 officer in Lagos earns the same salary as his counterpart in Zamfara or Edo and a professor in Ibadan, Lagos, ABU or OAU earned the same as his colleague in Akungba, Yola or Owerri. Also, it does not make economic sense for Lagos State governor to earn the same salary as the governor of Ekiti, Abia, Gombe, etc. And, the private sector takes its cue from the public sector. In the days of regional governments, public servants in Western Nigeria earn more than their colleagues at the federal level and other regions.

The Nigerian educational system needs a complete overhaul to cater for more skills acquisition in the technical fields for the production of well-grounded craftsmen (artisans). The provision of educational opportunities in tertiary institutions like monotechnics, polytechnics and universities are necessary for young Nigerians but efforts should also be made to promote vocational education to make those not inclined to serious academic work acquire skills to fit into a modern economy. This means that in present Nigeria, artisans, for example, masons, carpenters, electricians, welders, mechanics, machinists, plumbers, and so on, should be trained in vocational technical schools rather than through the apprenticeship system.

Nigeria should start to use some innovative programmes to promote economic activities and thereby create jobs as it is done in more matured economies. What readily comes to mind is the promotion of professional sports. This has worked very well in the United States of America (American football, lawn tennis, Basketball, Baseball, and Boxing), United Kingdom (Football, Cricket and Rugby) Brazil (Football), Cuba (Boxing), Australia (Cricket and Rugby), New Zealand (Rugby) and India (Cricket). These countries create millions of jobs for professional sportsmen and women, coaches, managers, technical and medical personnel, accountants and sport administrators; in addition, the building, maintenance and management of sports arena, create millions of jobs.

Governments can deliberately initiate massive public works programmes to create jobs and serve as safety nets for unemployed jobless persons. These programmes can involve the building of public toilets, market outlets, urban renewal projects, urban gardening (horticulture), garbage collection, and so on. In addition, global warming induced problems can be mitigated by large scale afforestation and anti-desertification programmes creating millions of employment opportunities all over the country. These programmes can be designed to be executed in all 774 local government areas or even in all the 8,812 political wards in the country. This way there will be a deliberate policy action to stimulate economic development nationwide to ensure job creation and mitigation of rural-urban migration.

Government can leverage on the now fledging entertainment industry, as epitomized by “Nollywood movies” to develop a huge labour-intensive industry that can create employment opportunities for educated young Nigerians. This has been accomplished successfully in India, Columbia, Brazil and Argentina, not to mention the highly developed entertainment industry in the United States of America and United Kingdom.

The tourism industry, particularly, eco-tourism can create employment for local conservationists, tour guides, hotel and guest house workers, caterers and managers. This is in addition to jobs that can be created for managing tourist centres and game parks (reserves) as the case with South Africa, Kenya, Uganda, Zambia and other eastern and southern African countries. Apart from these rural-based ecotourism centres, activities that complement urban renewal projects can be designed to attract tourists to urban areas. In this regard, the greening of urban centres can be designed. These can serve the multiple purposes of checking urban decay, reduction in global warming, reduction in atmospheric carbon dioxide concentration and very importantly, create jobs for able-bodied educated youths. This could involve planting of trees, flowers as well as clearing of drainage ducts.

Agriculture remains a key sector in the economy. Nigeria’s agriculture, which hitherto had been relying solely on natural rainfall, should be supported by irrigation to reduce the risks associated with seasonality of rainfalls and occasional drought spells. Construction of irrigation infrastructure (dams, channels, pipelines, etc.) require large dose of human labour thereby creating opportunities for large scale employment opportunities. And, the same goes with developing and organizing our agricultural storage and processing businesses.

In the oil and gas sector, government will have to go beyond the implementation of the Local Content Act to encouraging and supporting more labour-intensive secondary industries that can spin off from crude oil and gas exploration including but not limited to those involved in the production of petrochemicals, fertilizers, pharmaceuticals, plastics, petroleum products from modular refineries and household products. In the solid mineral sector, another growth area for the economy are artisanal and small mining activities that rely on labour-intensive technologies. In the area of manufacturing including SMEs, labour-intensive industries such as textile milling and metal fabrication should be supported to absorb the large pool of workers that now perpetually remain idle in the labour market.

Government should begin to adopt the posture that investing in infrastructure is the panacea to economic growth and employment generation in our economy. Workable infrastructure will not only engender the enabling environment for economic activities, thereby creating jobs, building infrastructural facilities themselves generate employment in large numbers. For instance, building roads, rail lines, irrigation facilities and housing estates will create employment opportunities for large numbers of semi-skilled and unskilled workers.

Akinyosoye, a retired professor of Applied Economics and Data Management is immediate past Statistician-General of the Federation.